Start by reviewing the right interview questions to ask the overqualified candidate.

Competition for Talent Heats UpThe recession gave small companies an opportunity to hire better employees. As the economy begins to recover, many small business owners plan to hire in 2011 to help cultivate business growth. Yet a more competitive hiring environment will require a better recruiting strategy.

A well-prepared interview will enable you to differentiate candidates who look overqualified on paper from those who can help boost your firm’s expansion.

It will also prevent a real-life version of the episode of The Office in which James Spader plays a hilariously overqualified candidate steam-rolling over the selection panel as he interviews for the boss’s job.

Start with Company History
When interviewing applicants who are more qualified, older or more experienced, begin by asking an interview question that creates an equal footing. Start by talking about how you got your business to where it is today, suggests Nan Langowitz, professor of management and entrepreneurship at Babson College.

Share your vision for the company and what you need -- such as a more diversified distribution channel. Conclude with a question: How can your expertise help me?

Interview Questions that Assess Skill
The best interview questions incorporate what you know about your business and what your business needs. For instance, list the skills and characteristics that keep you from expanding your business. Then create interview questions that probe how the candidate used those skills in the past, says Lori Davila, author of Perfect Phrases for Perfect Hiring: Hundreds of Ready-to-Use Phrases for Interviewing and Hiring the Best Employees.

After discussing the skills and characteristics that are specific to the job, delve into the challenges facing any overqualified candidate: motivation, small-business environment limitations and what happens when the honeymoon ends.

To go after motivation, ask: What allows you to be successful? “You’ll be surprised at the answers you get back,” Langowitz says.

“There’s no sense in hiding what you are as a company,” Langowitz says. Cultural-values questions will tell you how a candidate would handle the limitations that are inherent to your small business environment. You might describe a recent business trip where you stayed in an economy hotel; watch for body language as you listen to what the person says in response to your revelations.

Then, move on to organizational challenges by asking questions such as: Tell me about a time you had to do an assignment with limited resources. What did you do? What were the results? What frustrated you? What invigorated you? What external resources did you tap?

Opening the Company Kimono
Eventually, you have to find a way to tactfully ask -- without putting yourself or your firm down -- why such a fabulous job candidate would want to work for your company.

Start with a subtle exploration of the job seeker’s priorities, values and interactions with others, says Lin Grensing-Pophal, author of Human Resource Essentials: Your Guide to Starting and Running the HR Function with questions like: Tell me about a personal decision you made and later regretted? What was the decision and situation? How did you resolve the issue?

Then approach the issue directly: How do you feel about coming to this position from your last position? I’m curious about why this company is interesting to you and what would keep you here.

Finish with open-ended interview questions: What concerns do you have about the organization’s size or culture? What would you like to ask me?

Avoid candidates who ask only about things that affect them, such as time off or pay. Instead, focus on applicants whose responses and questions reflect an interest in how they can benefit you and your company’s growth.